Crony Capitalism Watch

Elon Musk’s Latest Crony Score

A tiny section of the defense authorization act is about to give his SpaceX another huge advantage.

Americans who celebrate both the exploration of space and private enterprise often warmly laud companies like United Launch Alliance, SpaceX, and Ad Astra, which cooperate with national space agencies in the pursuit of space-related technological advancement. However, the abstruse multibillion-dollar details of this niche industry are often dangerously overclouded by its lofty goals, making it particularly susceptible to cronyism. Currently, the House Armed Services Conference Committee (HASC) is hastily working out the details of the National Defense Authorization Act (NDAA) within which is Section 1615 — the bills’s provision on launch systems. HASC should ensure it doesn’t survive the fine-tuning process, because if it does, it’ll effectively grant SpaceX a monopoly on launch services.

There are currently only two competitive launch systems: SpaceX’s Falcon 9 and the Atlas V, which uses Russian rocket engines in the first stage of launch (Congress’s ban on those engines will take effect in 2022). Additionally, there’s the Delta IV, which will soon be phased out due to its expense and nearing obsolescence. If it becomes law, Sec. 1615 would limit the U.S. Air Force to new rocket engines and modifications to existing launch vehicles — presumably in order to lessen America’s dependence on Russian engines. However, it would also inordinately narrow the government’s range of choices when selecting contractors.

Title 10, Sec. 2273 of the US Code requires “the availability of at least two space launch vehicles (or family of space launch vehicles) capable of delivering into space any payload designated by the Secretary of Defense or the Director of National Intelligence as a national security payload.” This means that if Sec. 1615 makes it into the NDAA, the Falcon 9 and the pricey Delta IV will almost certainly be the only launch systems available — meaning that the Falcon 9 will be chosen for practically every mission.

Furthermore, even though the text of Sec. 1615 doesn’t explicitly prohibit new engines from being developed or Russian-dependent launch systems from being salvaged, that’s what it’ll effectively do. In a Senate hearing held last year, Pentagon officials informed the Senate Armed Services Committee that “any effort to simply replace the RD-180 with a substitute engine… would ultimately result in a new launch system, which would require recertification” — thus Sec. 1615 would make the goal of becoming less dependent on Russian-made engines less feasible in the long run. Judged as a piece of pro-American space policy, Sec. 1615 seems as flawed as it is shortsighted, but as an instance of cronyism, it’s a work of genius.

Since the turn of the millennium, SpaceX’s CEO, Elon Musk, has given heavily to politicians in both parties and spent lavishly on lobbying efforts to help advance past NDAAs that included legislation similar to Sec. 1615. If this isn’t an instance of blatant cronyism, then it’s Elon Musk’s dream come true. And even if this somehow weren’t an instance of cronyism, there’s still an excellent reason for why HASC should ditch Sec. 1615: SpaceX’s record isn’t spotless enough to warrant it an advantage of such magnitude.

In 2015, an unmanned SpaceX Dragon capsule blasted off atop a two-stage Falcon 9 rocket intended for the International Space Station. Two minutes into the flight, the rocket exploded and rained debris and fire onto the ground. One year later, a SpaceX Falcon 9 rocket likewise exploded on its launch pad during a test, destroying a $200 million commercial satellite. Similarly, earlier this year, SpaceX had to abort an attempt to dock its Dragon space capsule with the International Space Station due to a navigation problem related to faulty data. Ultimately, granting SpaceX such an advantage over other firms might cost Congress far more than scruples.

If HASC’s goal is lessening America’s dependence on Russian engines, it shouldn’t support legislation that’ll shrink the already tiny market of launch service-suppliers. Rather, it should advance policy that ardently encourages the development of launch systems incorporating American engines. Either this is a case of implausibly severe legislative ignorance or a case of cronyism that legislators assumed would go unnoticed — regardless, HASC shouldn’t let it become law.